Sunday, February 15, 2009

Not so immune after all

London house prices crash by 3.7% in January

Prime London residential prices fell 3.7% in January 2009, the second highest monthly decline on record, according to the Knight Frank Prime Central London Index. Overall prime London prices have fallen 21.4% since the March 2008 peak. Knight Frank Research has pushed its forecast for the peak to trough fall in prime central London from 30% to 35%. It still expects the bottom of the market to hit in mid 2009. Liam Bailey, head of residential research, Knight Frank, commented: "In early 2008 it was generally held that London's unique situation, with very strong demand set against weak supply, would help it escape the worst of the housing market downturn. As we reached late summer last year, it became apparent that no part of the market was immune. Every area and type of property was hit."

Posted by little professor @ 07:51 PM (1324 views)
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8 thoughts on “Not so immune after all

  • So much for London’s immunity from the price drops. Wasn’t it a certain ‘The right dis-honourable Kirsty Allsopp’ who implied that London was like a ‘seperate’ country within the UK, with regards to property. Looks like she were tawkin’ outta that big bubble butt o’ hers !

    I suspect that because the most ridiculous property market that this country has was in nour fair capital, wher some prices had already doubled in 5 years by 2002, now tripled and then quadrupled, the absolutely excessive prices achieved for even tiny 1 bedroom ex-council flats in grimy parts of north-east london ,and other completely dreadful parts of the ‘badlands’, are going to see dramatic 50% price declines. Also the money that could have been made in a few short years by purchasing multi-million pound properties will inevitably mean that the biggest losses percentage wise will come from these. £2 million pound properties in 1997 selling for £20 million in 2007!

    You asked for it chaps, well you got it in spades.

    Now where is confused76 when we need him………

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  • That’s 44% annualized and accelarating! Great news because government are clearly incapable now of halting deflation, and the market must bottom out to be healthy because only that will draw in the true market correcter, FIRST TIME BUYERS!

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  • Hurray. Another 80% would do nicely.

    London is an insane place – where people pay megabucks for living in a broom cupboard.

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  • penbat1….

    I’m not interested in percentages as such…….as long as a few smarmy Celebs go to the wall. Anyone got any favourites?

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  • japanese uncle says:

    Be in no doubt, London will be at the mercy of the mother of all HPCs very shortly, thanks to its particular dependence on financial business which should eventually shrink by 50%. 3.7% in a month is arithmetically expected to amount to almost 40% in 12 months, which actually cannot be ruled out, though unlikely.

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  • Unfortunately sad but true. Simply put, London is a financial centre that has lost most of it’s capital. As the world has now changed (the days of running up endless debt are finished) I can’t see much that London can offer the world apart from being a historical tourism destination. The housing market will reflect these new circumstances.

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  • And all of this while interest rates are so low. At some point in the near future interest rates will have to raise to compensate for the massive inflation caused by having them so low for so long. If that happens *before* the inflationary effects of quantitive easing are seen, then house prices could fall by a lot more than any of us expect. If it happens during or after, then it will support the price – but at least cash in the bank will be gaining visibly in relation to property.

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  • A few choice quotes from the article:

    “In early 2008 it was generally held that London’s unique situation – with very strong demand set against weak supply – would help it escape the worst of the housing market downturn.” – You mean VIs were all SAYING this (but probably not believing it) to try and keep ramping the market.

    “The primary reason for the unprecedented speed and level of decline is obvious in retrospect” – well only now you say this, I think most on this site could have told you this 18months ago.

    “Ironically, a more positive future outlook for the market to some extent depends on the speed of the correction. If we are to have a big price fall, it is much better that it happens quickly” – Well at least Knight Frank have got this right!

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